Despite that the prohibition and fines are quite heavy, unofficial trading of foreign currencies in the free market is still going on but more careful.

Recently, the Can Tho People’s Committee decided to fine Nguyen Ca Re with 90 million dong for exchanging $100 in an unlicensed gold store, making many people with the habit of trading foreign currencies via unofficial channels worried.

Hoang Thu, owner of a small business at the Tan Dinh Market, HCM City, said she often receives US dollars in cash from her relatives abroad, several hundreds US dollar each time, and usually brings to the gold store nearby to exchange for dong.

“Firstly, if necessary, I can still do the exchange transactions out of office hours. Secondly, the exchange rate is higher than at banks,” she said, admitting that she is aware that such transactions are not allowed, but does not think of such heavy fines, since only illegal foreign currency trading units are fined.

Not only Thu, this is also the common situation of many people who do not understand that trading foreign currencies at unlicensed spot when detected will be severely punished and the foreign currency cash are temporarily confiscated. Therefore, in the near future, many people think that the authorities need to educate the population about this regulation.

Meanwhile, gold stores and foreign currency exchange points, although knowing unlicensed foreign currency trading is prohibited, but still do the transactions normally. At some gold stores around Ben Thanh market, District-1, any amount of US dollar demanded by customers can be satisfied.

In the afternoon of 24th October, the owner of a gold store in this area quoted US dollar buying rate at 23,440 dong, and selling rate at 23,490 dong. Larger amount can have better price. When asked whether such trading can be fined, the shop owner said that he can deliver to customers’ home or customers can go inside to do the transaction.

In other gold stores in Ha Trung street, Hanoi, customers may make a call for exchange rate quotation. The owner of a gold store said that when customers have demand, shops still buy and sell US dollar cash but “should not be too much exposed.” When making the transactions, customers will go inside the store and then show the foreign currency to avoid being noticed.

Not only the penalties in Can Tho attracted public attention, but before in 2014, Hoang Mai gold store was caught by the police in Binh Thanh district for the exchange of $100 for a man, then the police searched and confiscated nearly $15,000 in cash and 559 bars of gold. This had a strong impact on the group of jewellery trading stores. However, a gold store owner on Le Loi Street, District-1, said that if only trading jewellery without gold bars or foreign currency, the turnover is very low, sometimes not enough to pay for costs.

An economist in HCM City noted the unofficial transactions in the free market are not disclosed, but foreign currencies are still trading quietly, therefore, it is difficult to detect. Authorities also do inspections but limited to the payment activities, listing prices of goods, services, advertising in foreign currency, etc. The reason is not having enough manpower and time to control all the units. The compliance with the law on foreign currency exchange still depends on the business unit and the people.

“According to the regulations, serious penalties for illegal foreign currency trading are necessary, but with fines of several times, such as a fine of 90 million dong with Nguyen Ca Re for exchanging $100 at a gold shop, is unreasonable,” said the expert added that it is difficult for people to know which stores are unlicensed.

The gold shops, according to this expert, know that the sale of dollars, gold bars are illegal, but where there is demand there is supply. In addition to the commercial banking system, the number of private businesses allowed to trade gold bars and foreign currencies is still low.

The network of commercial banks is mainly located in the inner city, not covered all over the city, and only serve in working hours. Hence, when the people have demand for gold bars or foreign currency trading, they often go to gold stores. Foreign exchange transactions in banks are also complicated while at gold stores, they are very simple and fast.

However, with this issue, the State Bank of Vietnam (SBV) commented that foreign currency exchange at banks is very convenient. In addition to the network of transaction points of commercial banks, the country has 580 other licensed foreign currency exchange agents.

Talking to VnExpress about the management of gold and foreign currencies business in the area, Nguyen Hoang Minh, deputy director of the SBV HCM City admitted the need of people to exchange, buy and sell gold bars and foreign currencies, but HCM City has more than 1,000 licensed agents for gold bars trading. With foreign currency, in addition to the transaction points of the commercial banking system, the city has also licensed more than 70 currency exchange points at airports, restaurants, 3-5 star hotels, tourist destinations, and several places in District-1 and 3, etc. Those transaction points should be able to meet the needs of people.

Minh added that in the past, SBV provided the list of allowed points for gold and foreign currency trading to the authorities at district level for coordination..

Based on that, the local police will conduct the inspection, and any violations will be fined. The police will check and fine unlicensed units. With unlicensed units violating the law of foreign currency trading, the police will cooperate with SBV to handle.

However, according to Minh since Decree 96 promulgated that the police force is not authorised to make records of handling administrative violations, only records of the incident. This leads to difficulties in the fight against unlawful foreign currency trading.

At the City Police, when detecting the violation, it only make a record of the incident and transfer the dossier requesting the Inspection and Supervision Department of HCM City (Department II) to consider and handle the violation. It cannot directly pass to the People’s Committee to issue the decision because there was no written record of the administrative violation. There are cases where Department II has made a record of administrative violation, but the penalty exceeds its authority, then it must transfer the dossier requesting the inspection and supervision agency to issue the sanctioning decision lengthening the processing time, even exceeding the deadline.

Facing this shortcoming, SBV HCM City recently cooperated with the police and the Department of Justice of the City to draft a document to submit to the People’s Committee of HCM City to amend and supplement Decree 96 to permit the competent police forces to make records on the administrative handling of violations related to trading of foreign currencies.

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